Investing.com -- In a sudden shift in policy, the Trump administration on Friday issued a fresh, month-long sanctions waiver allowing countries to purchase Russian oil and petroleum products already at sea.
The move is aimed at easing global energy prices as the fallout from the U.S.-Israeli war against Iran continues to disrupt markets.
Policy U-turn
The new Treasury Department license, effective immediately, permits the purchase of Russian energy cargoes loaded on vessels as of Friday, April 17, with authorization running through May 16.
The decision marks a stark reversal from just two days earlier, when Treasury Secretary Scott Bessent explicitly told reporters that Washington would not renew previous waivers for Russian or Iranian oil, stating that supplies originally "on the water" had already been exhausted.
The renewed waiver replaces an earlier 30-day exemption that lapsed on April 11. While it provides a temporary lifeline to energy-hungry importers, the measure explicitly excludes transactions involving Iran, Cuba, and North Korea.
The Iran factor
The Trump administration's move comes as global economies grapple with the most severe energy supply disruption in history, triggered by the ongoing conflict in the Middle East.
The partial closure of the Strait of Hormuz, a vital maritime chokepoint, by Tehran has kept energy markets on edge for weeks.
Though Iran signaled late Friday that the Strait is open for the remainder of a recently established ceasefire, shipping normalizations are expected to take time.
U.S. officials faced intense pressure from Asian partners, including India, a significant buyer of Russian crude, to extend the waivers during meetings in Washington this week with G20, World Bank, and IMF representatives.
Domestic and geopolitical risks
The decision highlights the precarious balancing act currently facing the Trump administration.
Rising fuel costs have become a major point of contention ahead of November's midterm elections, yet the continued relief for Russian energy flows risks undermining Western efforts to isolate Moscow's economy during its ongoing invasion of Ukraine.
Lawmakers on both sides of the aisle have slammed the extension, warning that it fills Russia's coffers just as it continues its war in Europe.
Furthermore, the move has placed Washington in a difficult position with European allies, who have argued that the current geopolitical climate is not the time to relax sanctions against the Kremlin.
Brett Erickson, a sanctions expert at Obsidian Risk Advisors, suggested that Friday's renewal may not be the final intervention, noting that as traditional policy tools to stabilize energy markets reach exhaustion, such waivers may continue to be used as a stop-gap measure.